Airline Empires - Airline and Aviation Articles, Airline Simulation - Dynamic Fleet Planning

Dynamic Fleet Planning - a Regional Application

Written by Courtney Miller
Tuesday, 24 January 2006
Page 8 of 9 Opportunity – Since a major goal of the AAM software is to preserve the original schedule as much as possible, most aircraft changes will take place in the weeks before a flight. Revenue management, in conjunction with DFP should account for most of the aircraft swaps, and last minute changes should be limited to irregular operations in order to preserve the schedule integrity. When deciding whether to swap an aircraft on a route, both the outbound and inbound flights must be considered. If there are 51 passengers waiting to leave CVG and only 12 booked on the return flight, calculations need to be made before a 70-seat aircraft is swapped onto this route. Not only do both flights of the original aircraft need to be checked for the feasibility of a swap, but so do the flights of the aircraft being swapped. This situation can be minimized by performing a swap earlier based on revenue data, rather than a last minute switch due to delayed aircraft or aircraft availability. Dynamic fleet planning, although designed for changes due to fluctuating demand, is also very adaptable at reducing the detrimental effects of irregular operations. If an earlier flight cancels at an outstation, a later flight of higher capacity can be sent on the next flight to “rescue” the stranded passengers without sending them to a competitor. For example, flight 5177, a 50-seater scheduled to depart DTW for CVG at 11:30 cancels due to a mechanical malfunction, and 32 passengers need to be rescheduled. If 45 passengers are already booked on the next flight (50-seater 5179 at 12:30), there would only be room for 5 of the displaced passengers, leaving 27 passengers to connect through a different hub, or a competing airline. By using DFP and up-sizing the 12:30 flight to a 70-seater, only 7 passengers would be required to be rerouted through a different hub or on a competing airline. As we’ve discussed earlier, the opportunity cost of booking a passenger onto a competitor’s flight is enormous and should be avoided at all costs. By up-sizing a “rescue” flight, the opportunity cost of delays and cancellations can be minimized. The speed at which a DFP system can calculate and suggest an aircraft swap could also make “rescue” flights applicable if an affiliate airline cancels a flight at an outstation Comair also serves. Benefits - Integrating a Dynamic Fleet Planning system at Comair would undoubtedly include a rise in operating costs. It should be noted that these costs are necessary to achieve the additional revenues that make DFP successful. Initiation costs of the system are difficult to estimate. Software purchase and integration would consume a large part of the initiation costs, followed by training of outstation ground crews to qualify them to handle all aircraft. It can be expected that there will be difficulty in adjusting to the new DFP system, and delayed flights and lost crewmembers can be an early problem that will be ironed out, but nevertheless will incur a cost to the company. Communication with the necessary employees within the company such as dispatchers, controllers, schedulers and crewmembers is an additional cost, however minimal. Total initiating costs can be estimated around $1 million. This however is easily eclipsed by the potential revenue gained. By applying Comair’s 152 aircraft fleet and three aircraft types to the data provided by the DCM model results, Comair can expect to see a yearly increase in revenue of 3.126% and an increase in profit of up to 13.66%. This all leads to an additional annual profit of $59,188 per aircraft, which brings in $8,996,576 additional profit to Comair by using the dynamic fleet planning system that would otherwise go unrealized. When initiation costs are applied, Comair can expect to see an additional first year profit of approximately $7.9 million assuming full implementation of a DFP system. Since more aircraft allow for more chances for substitution within the system, the annual profit per aircraft will actually rise with each new aircraft acquired. The 153rd aircraft at Comair could boost the annual profit per aircraft to an estimated $59,541. << Start < Previous 1 2 3 4 5 6 7 8 9 Next > End >>